The historian Kim Phillips-Fein agreed to meet at the Grand Hyatt New York hotel on 42nd Street on a sweltering Manhattan afternoon that rendered the air a thick gray soup. The building was air-conditioned but otherwise a monstrosity, made uglier by the fact that it stands next to the Beaux Arts masterpiece that is Grand Central Station. In the atrium, which resembled a mausoleum, we found an uncomfortable marble perch where we could sit unperturbed.

“These big marble heads,” Phillips-Fein said in reference to some giant, artless statues in a fountain. “What is going on with them exactly?” she wondered, the derision compounded by her native Brooklyn accent.

The man who would presumably know that answer now sits in the White House. Until 1976, the site where today the inglorious Grand Hyatt stands belonged to the Commodore Hotel. As Phillips-Fein writes in her sharp and necessary new book, Fear City: New York’s Fiscal Crisis and the Rise of Austerity Politics, Trump strong-armed a City Hall desperate to attract investment for New York into giving him a tax break in return for redeveloping the decrepit property. Thus the hideous, outsized building, with its ersatz shows of status. And the huge heads.

This wasn’t just the entree of an outer-borough mogul-in-training into Manhattan real estate; rather, Phillips-Fein argues, something bigger was afoot. “In the late 1970s, even as most middle- and working-class New Yorkers were finding it more difficult to live in their city, a glittering new world of wealth was starting to take shape,” she writes in her book. “Throughout Manhattan, new buildings were going up, designed to cater to the city’s elites—and, indeed, to elites from around the world who might be enticed to come over.” The city of writers and longshoremen, painters and seamstresses, was becoming the city of Donald Trumps and Gordon Gekkos. Those in power wanted it that way. Many still do, four decades later.

Nominally, Fear City is about the New York City fiscal crisis of 1975, brought about by reckless spending by liberal Republican mayor John V. Lindsay, who’d hoped to one day be president, and decades of shoddy accounting that left the city’s finances an indecipherable mess. There was an eventual $2.3 loan bailout by President Ford, though not before he was shamed by the Daily News in a headline—“Ford to City: Drop Dead”—that is among the most famous in journalism. ...